OBAMA (1/14/13): Now, the other congressionally imposed deadline coming up is the so-called debt ceiling, something most Americans hadn’t even heard of before two years ago. So I want to be clear about this: The debt ceiling is not a question of authorizing more spending. Raising the debt ceiling does not authorize more spending. It simply allows the country to pay for spending that Congress has already committed to.

These are bills that have already been racked up, and we need to pay them. So, while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up. If congressional Republicans refuse to pay America’s bills on time, Social Security checks, and veterans benefits will be delayed.

We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialist who track down loose nuclear materials wouldn’t get their paychecks. Investors around the world will ask if the United States of America is in fact a safe bet. Markets could go haywire, interest rates would spike for anybody who borrows money—every homeowner with a mortgage, every student with a college loan, every small business owner who wants to grow and hire.

It would be a self-inflicted wound on the economy. It would slow down our growth, might tip us into recession. And ironically it would probably increase our deficit. So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd. As the speaker said two years ago, it would be, and I’m quoting Speaker Boehner now, “a financial disaster, not only for us, but for the worldwide economy.”

So we’ve got to pay our bills. And Republicans in Congress have two choices here. They can act responsibly, and pay America’s bills, or they can act irresponsibly and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy. The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip. And they better choose quickly, because time is running short.

The last time Republicans in Congress even flirted with this idea, our AAA credit rating was downgraded for the first time in our history. Our businesses created the fewest jobs of any month in nearly the past three years, and ironically, the whole fiasco actually added to the deficit.

For ourselves, we’ve never believed that the average voter has an emotional or intellectual tie to the time-honored phrase, “the full faith and credit of the United States of America.” We also doubt that average voters understand the concept of “our credit rating being downgraded.”

But in that passage, Obama begins to explain what the GOP is threatening to do—and he starts explaining the types of harm which could result:

We’ve sent our troops to foreign lands—and we might not be able to pay them! Is your mother on Social Security? Those checks might stop coming too!

In response to an early question, Obama explained a bit more:

OBAMA: Chuck, the issue here is whether or not America pays its bills. We are not a deadbeat nation...And, you know, there are no magic tricks here. There are no loopholes. There are no, you know, easy outs. This is a matter of Congress authorizes spending. They order me to spend. They tell me, “You need to fund our Defense Department at such-and-such a level, you need to send out Social Security checks, you need to make sure that you are paying to care for our veterans.” They lay all this out for me, because they have the spending power. And so I am required by law to go ahead and pay these bills.

Separately, they also have to authorize a raising of the debt ceiling in order to make sure that those bills are paid. And so what Congress can’t do is tell me to spend X and then say, “But we’re not going to give you the authority to go ahead and pay the bills.”

One caveat: Congress can do that, of course. We thought we’d point that out.

A bit later, Obama said it again, although he didn’t explain it fully: “And the consequences of us not paying our bills, as I outlined in my opening statement, would be disastrous.”

Liberals should have been explaining all this for a good time now. Instead, we have clowned around with an idea that sounds even weirder than the idea of not paying our bills. We’ve clowned around with the idea of minting a magical coin.

In our view, Obama started in the right direction today. We offer one word of warning:

Millions of people believe that our deficit spending and debt have become an existential crisis for the nation. This is one of the three million topics we liberals have never stooped to explain during the past thirty years.

To voters who believe such things, the idea of enduring a short-term crisis may not seem mad or insane. And the fact that voters believe these things falls on no one but us.

The liberal world has twiddled its thumbs over the past thirty years. We’ve let the Norquists talk crap to the people—and we’ve been too high-blown to challenge, talk back or explain.

For ourselves, we like Grover Norquist and we admire his energy; it’s just that the things he says and almost surely believes are so crazily wrong. We the liberals are a good deal harder to like or admire. So great, so grand, so self-admiring, we seldom stoop to talk to the people.

Darlings, it just isn’t done!

Grover knows where the people live. When our turn comes, we’re eager to tell the people that they’re just a big gang of racists—and authoritarians too, of course. Before the week is done, we expect to show you how Chris Mooney recently argued that point.

We the liberals lapped it up. It’s how we conspire to lose. It’s how we end up with politically crazy "solutions" like minting a magical coin.

45 comments:

The "holding the economy hostage" language is pleasing, but what the GOP is doing isn't all that bizarre--and it's not, as some would have it, trying to undo spending that has already happened.

Suppose your no-good brother-in-law comes to you (for the 99th time) asking for another loan to pay his rent. You sit him down and tell him that before you'll give him any more credit, you want to hear his plan for living more frugally.

Are you holding your brother-in-law's housing "hostage" to your demands for more responsible behavior? The answer is "yes" only if you're ready to let the sheriff come and put his belongings on the curb.

Is the GOP ready to push the country into a financial crisis? Or are they bluffing? Either way, the GOP's threats aren't as outrageous as the bluster from "our side" would have us believe.

It's a little confusing, but there's some truth on both sides here. The President doesn't "set" the spending, but he does submit a budget that is the starting point for the Congress. The Congress then haggles and argues about various parts of it and it usually goes back and forth between Congress the President a few times before it is finally approved and appropriations are made. But it is entirely Congress' role to appropriate the money or not appropriate it. That is spelled out in the Constitution. And if Congress doesn't appropriate the money, the President can't unilaterally (with a few exceptions I think) go out and spend it.

So the President does have a role, and a very important one, in the spending process; but he doesn't have absolute authority to spend whatever he wants. (NOT spending on something that Congress appropriates money for is a different question, and I don't think the answer is clear.)

"a budget that is the starting point for the Congress. The Congress then haggles and argues about various parts of it"

In your fantasy world.

Here on Earth, the GOP congress outright lockstep rejects the President's submission and goes its own way (as is their perfect right -- the stupid part is in asking Presidents to submit anything) in crafting a budget.

"The President doesn't have absolute authority to spend whatever he wants."

One thing people, including Quakers, need to stop doing is analogizing government spending to household spending. This situation is not in anyway similar to your relative's spending habits. If your relative can't pay his rent, you can decide toi give him the money or watch his landlord toss him out on the street. In the case of the country, Congress can and likely should have a discussion about the debt level and the deficit spending. Just not at the same time the borrowing level is up against an utterly artificial, fictitious ceiling that prevents borrowing.

Why should the debt we all owe each other, the Social Security trust fund of 4.4 trillion be counted against the ceiling, for example? What about 30 year notes issued last year? The ceiling measures aggregate debt not what is due in the near term or what may contribute to the deficit which would increase the total debt. The ceiling is a construct designed to foster the kind of discussion our partisan playhouse, Congress, won't have. There is a cure but it is not shutting down the government.

Congress can and likely should have a discussion about the debt level and the deficit spending. Just not at the same time the borrowing level is up against an utterly artificial, fictitious ceiling that prevents borrowing.

You forgot to explain why. You can flatly demand "not now," but no one is listening.

Just like the profligate brother-in-law (I'LL decide what analogies I'll use, thank you), the treasury has run out of money and is asking for more. If the GOP wants to try to force a discussion on future spending at this juncture, I say good luck to 'em.

That said, the GOP--and the country--has a serious problem. If they carry through with their implied threat to refuse a rise in the debt limit, their own house won't be spared.

Quaker, maybe to try to make your irrelevant analogy faintly analogous, try this. You've co-signed on your brother-in-law's lease agreement. That makes you responsible for the rent owed by your brother-in-law, and/or by you, on the months already lived in the housing and on any remaining on the lease.

Just stick with "you can't analogize government spending and household spending" and leave it at that. It is a fundamentally flawed analogy, of the apples-and-oranges variety. Neither you nor your spendthrift brother-in-law can pay your debts by printing more money (or "raising the debt ceiling"). The Congress can (or rather the Fed can, and if you think the Fed is going to refuse to do so if asked I have some prime real estate to sell you).

Are you holding your brother-in-law's housing "hostage" to your demands for more responsible behavior? The answer is "yes" only if you're ready to let the sheriff come and put his belongings on the curb.

Well, as long as we're using this flawed analogy, then instead of the sheriff coming to put our nation's belongings on the curb, the global financial system is coming to eradicate our economy; and as a result, a great many of us would indeed wind up homeless. So I'd say yes, the GOP is threatening to hold us hostage, and the only reason they are doing so is to try to force us to cut "entitlements" because that's their ideology and they can't it done through the usual means (by legislation). That is reckless and outrageous, to my mind. That is your brother-in-law threatening to burn down YOUR house if you don't pay his back rent.

It is precisely because Obama hasn't shown a willingness to take stands like the one he (might have) take(en) today that some liberals were advocating a "crazy" solution. Obama has already caved on the debt limit issue once; this tough guy speech of his would have been much more appropriate had he given it then -- but he didn't. If it's wrong to negotiate over the debt ceiling, why did Punkbama do it the first time? Instead of giving this speech when he should have, the first time, he gave in, setting up this go-around and as a result liberals are -- rightfully -- both disgusted by his perpetual pussiness, and afraid that he'll keep it up all through his second term. If -- and it's a big if -- Obama sticks to his guns here, it will be the very first time in his entire presidency that he has done so on a big, publicly debated issue. The purpose of the coin was to try to force a solution out there that would either give Obama an alternative to caving in yet again, or force him into taking a principled stand once he rejected it and the other possible solutions. He seems to be taking that stand now, so maybe there's more to the thinking of some of the "lizards" on the left than Bob will give them credit for.

Pfft, I'll believe he's taking a principled stand once the votes are counted, thank you. I agree with Digby, I think he wants a "Grand Bargain" that will necessarily include cutting "entitlements" so he can ride off into the sunset as the great man who made the tough choices in the name of bipartisanship.

Somerby assumes -- remarkably, in face of the evidence to the contrary -- that "liberals" (meaning the Democratic party, and corporate media types hired to represent those policies -- want the same thing that actual liberals want.

Recall that Obama referred to the last debt ceiling "crisis" not as a travesty, but as a great opportunity. Opportunity to do what? Cut Social Security benefits and raise the Medicare age, by pretending he was under the gun and had no choice in the matter because, it's all about shared sacrifice. This time he has no patience because -- at least, we have to hope not -- since he knows that Republicans won't let him give the store away, unless he has go so far that even Democrats will turn away from him.

What Somerby demands is that Obama, and WaPO-type liberals generally, make a coherent case for policies they don't actually want.

This is perhaps to be expected of a guy who, after all, regards, absurdly, the Clinton/Gore years as the apotheosis of liberal values. The same Bill Clinton who deregulated the financial services industry and who, post-presidency has earned nearly $100 million from those same interests. And the same Gore who cashed in Current TV for a $100 million profit.

But bring back that consummate liar, Bill Clinton, to explain the world to us, and all will be well.

The battle over the debt ceiling is really a battle over whether to reduce federal spending, and by how much. For that reason, Obamna's statement is double-edged.

When the Reps say they'll increase the debt limit as long as he agrees to cut spending by some amount, it'll be hard for Obama to stand pat and thus be forced to allow things he (rightfully) says shouldn't be be allowed to happen.

It's not late if you're not going to negotiate anyway. There was a lot of discussion a month ago over whether the debt ceiling negotiation should be part of the fiscal cliff deal...with many Dems thinking Obama would be foolish to cut a fiscal cliff deal only to have the rug pulled out from under a month later.

But the Obama administration was clear back then and clear now that they are not going to negotiate on the debt ceiling. That Congress simply has to raise the debt ceiling.

The GOP has always had something between a weak hand and no hand at all in this poker game. They're really going to let the gov't stop making some payments? And let Obama pick which payments to make?

The GOP threat to bring gov't and a large part of the economy to a screeching halt unless we cut Grandma's social security by $100 ten years from now isn't a liberal messaging problem. It's a dysfunctional GOP problem--dysfunctional because their own supporters will abandon them if they go through with this.

Back when Bush was President, Obama and many other Dems voted against raising the debt ceiling. This is a normal political battle and political theatre. Today's Republican aren't nuts or treasonous, nor were Obama and the Dems back when Bush was President.

Yes, and the oversimplistic analysis of "Sen. Obama was against raising the debt ceiling them, and President Obama is for it now, thus he is a hypocrite" is part of the reason this country is in a mess.

People like you want to believe everything they are told at face value and are unwilling to do the hard work of researching and thinking for themselves.

Sen. Obama's vote was clearly a protest against the abandonment of "pay-go" rules that required Congress to "pay" for any new spending AND tax cuts without increasing the deficit.

It was those very rules that turned this country from deficit to surplus, before Dubya took over.

And if you took the five seconds it takes to google up that speech and read it for youself -- without anybody else spinning pleasing tales about it for you -- you'd know that.

The important point to note, David, is that Obama was allowed to vote, up or down. Just put the matter to a vote now, and there is no doubt it would pass. If your tea party friends want to make a protest vote, fine. That's democracy. If they don't like the outcome, then maybe they should try to figure out how to get twice as many republicans elected to congress with 2,000,000 fewer votes than the dems. What the repubs are doing now is unprecedented.

The Tea Party wants cuts to Social Security and Medicare Benefits, and they will hold House Republicans accountable in 2014.

Never mind that the Tea Partiers are fools for voting against their own interests, and misguided for thinking the Debt should be addressed immediately with draconian (austerity) measures while the unemployed are left to the mercies of market forces.

Obama will not put his signature to cuts to entitlements, (which is what this is really all about) even though he is a lame duck President.

Our children will inherit our liabilities, but they will also inherit our assets. What they do with them is up to them, not us. (In the long run we are all dead.)

It's pointless to try to implement a 20 or 30 year plan when the government can be radically changed in the House of Representatives every 2 years, and leadership can be changed every 4 years.

Fix the recession now, and hand our kids a stable economy, if not a booming one.Get out of Afghanistan and not leave a war behind for our descendants.

"WE DO NOT INHERIT THE EARTH FROM OUR ANCESTORS, WE BORROW IT FROM OUR CHILDREN" - Old Hindu saying

Congressional taxation and spending bills, combined with the electoral process is how we "enforce fiscal discipline."

("Discipline" which, of course we desperately *don't* need right now -- right now when our biggest economic problem is too little spending, not too much -- but you'll never get that thought through you thick head...)

You don't like what your reps do, you vote for (er, I mean, you buy) different ones.

"Obama's (irrelevant) budget bill won't be on time, wahhh!," sez the crybaby "actuary."

FY 2014 - Has notified Congress that it will be late prior to the deadline and we don't know how late it will be.

Obama did miss the deadline on three of four prior

But he was late and that's terrible, right? Well, how many times did Reagan meet the Congressionally-mandated deadline for his mid-session budget review? Once in eight years. When he was late, it was anywhere from 10 days to 46 days late. (Consider also that the great scofflaw (sarcasm) Reagan missed the deadline for his initial budget proposal by 45 days in 1988 (not a transition year), and H.W. Bush missed the deadline by 21 days one year out of three tries.) My point being, all the hand wringing about the timing is, asRicardo117 points out, just political theater.